WEEK-IN-BRIEF: Time to hedge in aluminium and zinc? Alumina spread log; Europe’s copper rod producers; zinc premiums in Asia; Qingdao timeline

What were the key market moves and news over the past week? Metal Bulletin’s editor Alex Harrison rounds it up.

What were the key market moves and news over the past week? Metal Bulletin’s editor Alex Harrison rounds it up.

It’s time to hedge. That was the advice of metal analysts to aluminium and zinc producers last week as the metals traded at multi-year highs.

One from the archive: read how zinc producer Nyrstar put on a strategic hedge earlier this year.

Aluminium premiums in Europe could rise through the summer, traders predicted. “The hope for lower premiums is not there anymore,” one said. Read the report here.

Check out Metal Bulletin’s premiums for extrusion billet.

Still, Chinese aluminium prices are not sufficiently high to encourage producers to fix forward prices, brokerages in Shanghai said. Find out more here.

Since January 2013, Metal Bulletin has been tracking the differential between alumina prices — which we index — and all-in aluminium prices. Soaring aluminium prices have left alumina behind. Find out how Jethro Wookey covers the spread.

The UK court of appeal deferred making a judgement on the case between Rusal and the London Metal Exchange, which has been prevented from making changes to aluminium load-out rates as a result of Rusal’s earlier victory in court. The market will now have to wait longer to see how the case is resolved.

“Chinese funds move into base metals has been an epic one”: read about how rotation into lead from zinc drove the heavy metal market in the last week of July.

But profit-taking and rotation out of metals and into other assets — Chinese equities look underpriced to some — drove strong selling of lead and zinc on July 30.

Zinc cash-to-three-month spreads on the LME have been tightening. The backwardation, combined with high LME prices, has weighed on premiums in Asia, Deepali Sharma reported from Singapore. Find out what she wrote here.

Metal Bulletin published its latest index for copper concentrate TC/RCs on July 31, shortly after PT Freeport Indonesia struck a deal to restart exports from Indonesia’s Grasberg mine. Click here to see how the market moved.

Copper rod producers in Europe could benefit as Russia prepares to restart exports of copper cathode after export duties on the product were removed.

An embargo on Russia’s Norilsk Nickel would harm nickel consumers in the USA and Europe rather than the Russian company, the head of rival nickel producer Eramet said.

The third-quarter ferro-chrome benchmark settlement between stainless steelmakers in Europe and alloy producers in South Africa fell. Mills argued that the spread between the prices they paid compared with the prices paid by mills in China should narrow. Read the story here.

Advanced material companies Umicore and Vital Materials have signed a deal to set up a joint venture to produce indium tin oxide in China, Metal Bulletin’s Chloe Smith discovered on a close reading of Umicore’s results.

Vital’s founder George Zhu talked about the opportunities for indium producers in China in an interview with Metal Bulletin earlier this year. Take a look here.

More companies, including one linked to the firm at the centre of the probe at Qingdao probe, have gone to court to assert their rights.

There is a timeline of events in Qingdao here.

China-based business news service Caixin provided an insight into the teams that investigate corruption for China’s government under President Xi Jinping, as a follow-up to an earlier piece, headlined: How the Hammer Falls as China Nails Corruption.

Very topical in the wake of the investigation into Zhou Yongkang that was announced on July 29. Zhou is a former member of China’s politburo, and the former head of China’s police and legal system.

Alex Harrison
Twitter: @alexharrison_mb

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